Chronic infection with hepatitis B virus (HBV) could lead to liver cirrhosis and hepatocellular carcinoma, which account for 600,000 annual deaths worldwide. Vaccination of the at-risk groups with recombinant small (S) envelope protein can prevent viral infection in the first place, thus averting such devastating health consequences. Unfortunately, breakthrough infection continues to develop in 5 - 10% of infants born to infected mothers despite administration of hepatitis B immune globulin (HBIG) in addition to the vaccine immediately after birth. The responsible HBV isolates often harbor point mutations in the antigenic sites of the S protein suggesting immune escape. Accurate prediction of the threat posed by vaccine escape mutants requires evaluation of their biological fitness. Our preliminary studies revealed impaired virion secretion by many escape mutants, which could nevertheless be rescued by an M133T mutation creating a novel N-linked glycosylation site. Aim 1 will further validate M133T and others as compensatory mutations that restore the biological fitness of the escape mutants. We will also investigate whether N-linked glycosylation prolongs S protein intracellular trafficking to promote virion formation. Aim 2 will examine the infectivity of vaccin escape mutants in a human hepatoma cell line reconstituted with the newly discovered high-affinity HBV receptor. In particular, we will determine whether HBIG could neutralize the infectivity of vaccine escape mutants. A unique feature of HBV is that majority of the S protein is secreted as the noninfectious subviral particles that exceed virions by a stunning 1,000 fold or greater. Considering that the S domain interacts with heparan sulfate proteoglycan (HSPG), the low-affinity HBV receptor, Aim 3 will examine whether subviral particles interfere with HBV infectivity by competitive binding to HSPG. We will also explore whether they promote HBV infectivity in the presence of anti-S antibodies by serving as decoys. This could explain why breakthrough infection could also be caused by the wild-type virus when the viral load is high. In summary, the proposed studies will evaluate the biological fitness of vaccine escape mutants alone or together with a compensatory mutation, and verify two alternative mechanisms of breakthrough infection. If anti-S antibodies cannot neutralize the infectivity of vaccine escape mutants, then future HBV vaccine should include preS sequence found in the large and middle envelope proteins as well.